IMF's $3 Billion Bailout Sparks Controversy, Protests, and a Surge in Coal Imports Amidst Energy Sector Reforms in Pakistan

The IMF approved a $3 billion bailout for Pakistan in July of this year, contingent upon the country's implementation of reforms and the restoration of viability to its energy sector, particularly in addressing power subsidies. With the government no longer setting electricity bills, Pakistani utilities can now pass on higher fuel costs and avoid bankruptcy. This development has a positive impact on Pakistan's coal imports, as utilities can operate their power stations profitably. In fact, Pakistan's coal imports have surged, rising from 100kt in January of this year to over 600kt in recent months. However, it has also resulted in a doubling of electricity bills over the last three months. Bills are now reaching approximately 50 rupees per kilowatt-hour.

The rise in utility bills has sparked violent protests in recent days. An incident involving a worker from the utility company K-Electric (KE), responsible for power generation and distribution in Karachi, highlights the extent of public frustration, as the worker was attacked by an enraged mob.

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